ITG Moves to Acquire Remainder of POSIT Joint Venture From BARRA Subsidiary of MSCI
Investment Technology Group, Inc. (ITG) announced today it has signed an agreement with Morgan Stanley Capital International (MSCI) to acquire the remaining 50 percent interest in the POSIT Joint Venture from BARRA POSIT Inc., a subsidiary of MSCI. Upon completion of the transaction, which is expected during the first quarter of 2005, ITG will become the sole owner of the POSIT Joint Venture.
The agreement provides for the purchase of all intellectual property relating to POSIT, the world's largest equity crossing network, which matches institutional buyers and sellers, and TriAct., an anonymous, continuous equity crossing with opportunities for price and size improvement.
ITG says the purchase price will initially consist of $90 million, payable upon closing the transaction, and a contingent component payable over the ten years following closing equal to 1.25 percent of the revenues from the business of the POSIT Joint Venture. ITG has the right to accelerate these contingent payments at any time during the ten-year period, it was announced in a press release.
The POSIT Joint Venture was formed in 1986 between ITG, then a unit of Jefferies & Co., Inc., and Barr Rosenberg Associates, Inc., which created BARRA, the risk-management software company. POSIT -- an acronym for Portfolio System for Institutional Trading -- went live in October 1987 as the first intra-day equity matching system. BARRA was acquired by Morgan Stanley in June of 2004 and merged with MSCI.
Raymond Killian, ITG's chairman, president and chief executive officer, who is quoted in the release, calls this a strategic acquisition for ITG, and states that complete ownership of the business line and intellectual property will allow the company to be more aggressive when pursuing new business and growth opportunities.